Apartment Investor's Advisor August 2010 EZine

Katherine J. Higgins

The Market Leader in North Bay Apartments

Investment Broker

Bradley Real Estate - Luxury Division

(415) 721-2595 office

(415) 302-7730 cell

(415) 721-2596 fax

851 Irwin Street, Suite 104

San Rafael, CA 94901

www.khiggins.com

Apartment Investor's Advisor

September 2010 EZine

Dear Marin County Investors,

Low Interest Rates Driving the Marin County Apartment Market

San Rafael - For the first time in several years exchange buyers from outside the county are coming to Marin County to purchase prime investment real estate that is poised to appreciate. Since prices dropped nearly 20% since 2007 investors are now coming to one of the highest priced areas of the United States to position themselves for big gains in the future.

With interest rates at historical lows in the mid 4% range, apartment buyers are scooping up deals from distressed owners, and experiencing immediate cash flow upon the close. For example, in the past 30 days several deals closed that will pay the buyer's 10% cash on cash. One recebt closing was a 13 unit property that sold in 2003 for $2,083,000. This month it closed for $1,800,000 with income at $182,000 annually making the gross rent multiplier at sale 9.8. Marin County has not seen a price like that for more than 10 years.

Another property, in which I represented the buyer, was a pride of ownership nine units in Sausalito that sat on the market for over two years. The list price was $3,495,000 and the rents had dropped significantly from the peak rental market of 2007. My buyer purchased the property for $3,050,000 or 16 times today's low rents. This price was only $50,000 more than what the buyer had paid in 2002.

The loan rate obtained by the buyer was a phenomenal 4.48% locked in for 5 years. The property will cash flow from the close of escrow and with even a 10% bump in rents over the next few years will add significant cash flow to the buyer's income stream.

Smaller properties in the 2-4 unit category are also selling at big discounts. For instance, duplexes that traded at over $900,000 during the peak of the market in 2006-2007 are now selling in the mid $600,000 range. Interest rates for these size units are also very low, with many buyer's locking in at 4.75% interest.

At the same time, apartment rents have passed the bottom of 2009 and are now stabilizing. With an improving economy we should see values begin to move back up over the next 24 months.

Regards,

Katherine J. Higgins

Investment Broker in Marin County
Since 1986
Mobile: (415) 302-7730

Listed below is my current inventory.